Lucas Ross

NISSAN'S URGENT CALL FOR SURVIVAL Just weeks after we wrote about the iconic car seat manufacturer Recaro going bust, senior officials at Nissan have made the startling revelation that the company faces a critical 12 to 14-month window to survive This dire prediction underscores the immense challenges currently facing the automotive industry and the staggering difficulties in transitioning to electric vehicles (EVs) and shifting global economic conditions. Nissan’s predicament seems to be exacerbated by Renault’s decision to reduce its stake in the company, a move that has strained the long-standing Renault-Nissan-Mitsubishi Alliance. This alliance, formed in 1999, has been pivotal in sharing technology and resources, enabling the partners to compete more effectively on the global stage. However, with Renault realigning its strategy towards its own EV development, Nissan is left seeking a new anchor investor to replace the financial and strategic support previously provided by Renault. It is surprising to hear of Nissan's woes in the UK when Nissan sales are 12% higher in 2024 than in 2023 and will perhaps give some confidence that the UK sector is fairing well. However, the recent budget coupled with the Court of Appeal ruling on motor finance compensation will make the next 6-12 months very difficult for the industry. Nissan is reportedly looking to push its partnership with Honda to new levels, so we may see a merger of these 2 giants of the automotive world. This latest news cause even greater concern for all of those working in its UK division together with all of its suppliers, particularly if Nissan fell over - the domino effect would be a very long one and Sunderland will suffer a huge blow. Whilst industry chiefs are asking the government to urgently review their future plans for the industry, most will be scared that any intervention should be very well considered so as not to repeat the fallout from last month's budget.

Last week we donated over 1,000 items to the Tree Of Life Charity in Wythenshawe, Manchester, an organisation dating back to 1984 who provide resources and help to improve the health and well-being of those in the local community. Tree of Life Centre Wythenshawe‘s valuable services to the local community range from their furniture re-use shop, community cafe, computer room, health and wellbeing sessions, advice and friendship groups. They also provide an opportunity for local people to get involved, train for qualifications and get valuable experience by volunteering with them. Just like our approach with our business, we put the effort in to carefully select the items to purchase and donate in order to maximise the difference we could make to the users of their services. We provided toys and books towards Christmas, toothbrushes, shower gel, sanitary products, plus a wide variety of food and treats towards hopefully bringing a smile to a few faces at Christmas time. We were very grateful to The Tree of Life (https://lnkd.in/dnM25_Cj) for accepting the entirety of our donation and for the time Francess, the Chief Executive, took on a Saturday morning to show us around the centre and explain how their success has led them to running out of space in their current building. We must also express our thanks to ASSETtrail @ JPS Chartered Surveyors from whom we were able to purchase a number of items. Closing down a business is difficult for all stakeholders, but in following the proper process and disposing of their assets, it does provide the opportunity for others to purchase items and allow funds they have available for good causes to do even more good. We would encourage anyone thinking of giving to charity to consider how you can best donate to have the maximum impact.

IS IT TOODLE-OO TO TYPHOO? Typhoo Tea, a beloved 120-year-old British brand, is facing a challenging chapter as it seeks a rescue deal to overcome financial hurdles. The company has filed a notice to appoint administrators from EY, a strategic move to buy time and explore solutions. In recent years, Typhoo has seen its financial health decline sharply. Sales plummeted by 26% last year, dropping to £25 million from £34 million in 2022. Meanwhile, losses skyrocketed to £38 million from £9.7 million, highlighting the urgency of the situation. Adding to the financial strain was a significant break-in at Typhoo’s Merseyside factory, causing extensive damage and leading to £24 million in exceptional costs. This incident not only disrupted operations but also added to the mounting financial pressures. In a bid to steer the company back to stability, Typhoo has brought in Dave McNulty, the former head of Burts crisps, as the new CEO. McNulty is spearheading a major restructuring of the supply chain, which includes tough decisions like reducing the number of tea plantations they work with to just three. While this move aims to streamline operations, it may also impact consumer prices. Typhoo is not just focusing on financial recovery; it’s also committed to ethical practices. The company recently launched the “Fear Free Tea” campaign, addressing violence and abuse in the tea supply chain. This initiative challenges the industry to ensure their products are free from such issues, reflecting Typhoo’s dedication to making a positive impact. However, will consumers be won round by these practices or will they focus on keen prices of great products, something that may be challenging to deliver with the restructuring of the supply chain. Whilst you can put your feet up and enjoy the result with their tea, sadly the same cannot be said for this sad news. Hopefully this beloved brand will be saved.

THE HIDDEN DANGERS OF UNLICENSED INSOLVENCY ADVISERS Navigating insolvency is challenging, especially for directors facing financial strain. In these moments, it’s tempting to cut corners, turn to low-cost advisors, or buy into a dream sold by unlicensed, often rogue, insolvency advisors. But recent cases—such as the winding-up of a Manchester firm offering unlicensed insolvency services—reveal the true, often devastating costs of choosing unregulated advice. WHAY ARE ROGUE #INSOLVENCY ADVISERS SO RISKY? Licensed insolvency practitioners (IPs) are qualified professionals bound by strict regulations, ethical standards, and oversight. They act in the best interests of both the company’s directors and creditors. Rogue advisors, on the other hand, frequently lack training, insurance cover for when it goes wrong, they have no oversight, so can promise whatever they need to encourage a director to buy from them.  They may promise directors ways to reduce debt, avoid personal liability, phoenix a company or dissolve a business that break laws and are unethical. These shortcuts can quickly lead to disastrous outcomes. One of the primary dangers posed by rogue advisors is that they often encourage directors to engage in dubious practices, such as transferring assets away from creditors or selling them at a significant loss. Whilst these 'look after yourself' shortcuts sound appealing, they can lead to severe legal and financial consequences for directors. THE REAL CONSEQUENCES OF BAD ADVICE: Personal Liability: for acting improperly, such as by misrepresenting the company’s financial position or failing to meet their fiduciary duties to creditors. Director Disqualification: Beaching UK company and insolvency laws can lead to disqualification. This can stop someone being a director for up to 15 years, severely impacting their professional future. Criminal Charges: In cases where advisors suggest fraudulent activities, directors may face criminal charges. In extreme cases, this could lead to fines, disqualification, or even imprisonment. Only this week was a director imprisoned for failing to provide company records. Reputational Damage: Associating oneself with disreputable advisors can tarnish a director’s reputation in the marketplace, impacting future career opportunities or business relationships. TO AVOID THESE PITFALLS - Only engage licensed IP's. You can verify the exisitence (or not) of an IP's license via the UK Government's Insolvency Service's register of IP's. Engaging a licensed IP may appear more costly and scary initially because they advise you honestly, but it ensures a safer path through insolvency, reduces the risk of legal issues and protects both the directors and creditors. If you’re facing financial difficulties and need guidance, reach out to our team of licensed professionals at Lucas Ross on 0330 128 9489. Getting the right help today can make all the difference tomorrow.

TURNING POINT? Bury Director Jailed for Failing to Deliver Accounting Records In what could be a turning point for Liquidators and directors alike, Vezubuhle Ndlovu, a former director of VN Electrics Limited, has been sentenced to 10 months in prison. This conviction, highlights not only Ndlovu's repeated failure to comply with insolvency regulations, but also the mounting consequences for directors who neglect their legal responsibilities. Ndlovu's company, VN Electrics, was liquidated in 2019, leaving more than £200,000 in unpaid taxes to HM Revenue and Customs (HMRC). When a business fails, the director is legally required to hand over accounting records to the Liquidator for review and investigation. Ndlovu’s refusal to provide these records, despite numerous reminders, hindered a full investigation and ultimately led to criminal proceedings against him. The Significance of This Case This conviction could mark a turning point in the battle against directors who fail to meet their obligations in the face of liquidation. Ndlovu’s actions exposed creditors to further risk because it was impossible to establish the true extent of VN Electrics’ financial activity. Over £1 million in sales and purchases went unaccounted for due to the lack of records, raising questions about whether assets were hidden or mishandled. Companies that fail to maintain records are more likely to fail and such actions put creditors at unacceptable risk. In Ndlovu’s case, his repeated refusals—spanning multiple years—left investigators unable to determine the company’s actual financial standing. A Broader Impact on Directors? Ndlovu’s sentencing could signal a firmer stance on directors’ duties and the transparency required in corporate collapses. With many similar scenarios of directors failing to co-operate, this outcome may set a precedent. Are more directors facing the possibility of imprisonment for such failures? Will more company records become available and allow full and proper investigations by liquidators? For businesses and directors alike, this serves as a powerful reminder: neglecting legal duties can have serious, long-lasting consequences ,particularly in the aftermath of a company’s liquidation. And for Liquidators, this victory in holding a director accountable may represent a turning point in their fight to ensure corporate transparency and protect creditors. Vezubuhle's refusal to provide records obstructed the insolvency process, shone a light on the critical need for accountability, and ultimately led to his downfall. This case might be just the beginning of a tougher regime, where the legal framework of insolvency is strictly enforced. The message is clear: those who don’t comply with their legal obligations may face the full force of the law, with jail time a real consequence.

THE SEAT OF CHAMPIONS LOSES ITS GRIP IN FINANCIAL DOWNTURN Recaro Automotive, the iconic car seat manufacturer, has closed its doors, putting over 200 pepole out of work. Recaro are known for providing high-performance, ergonomically designed seats for sports cars and commercial vehicles alike. Its financial collapse marks the end of an era and highlights the fragility of the supply chain within the industry. Recaro’s insolvency stems from rising production costs, price hikes, and the loss of several key contracts that contributed to the company’s operational challenges. As a trusted supplier for numerous manufacturers, Recaro’s downfall has had an immediate impact on vehicle production across the sector, most notably affecting companies like Ineos Automotive. Ineos Grenadier Delays Ineos, the manufacturer of the Grenadier SUV and Quartermaster pickup, had already felt the effects of Recaro’s insolvency. It announced delays in production due to the unavailability of crucial components—seats that were to be supplied by Recaro. With production previously halted until early 2025, this disruption highlights the risks faced by manufacturers when dependent on key suppliers. While Ineos has been working to source alternative seat suppliers, the delay underlines the fragility of global supply chains in the automotive sector.  Broader Industry Concerns, Emissions, EV Demand, and Economic Pressure Recaro’s insolvency is only one example of the mounting pressures faced by the automotive sector, and it is not just a supplier issue—it underscores wider financial and operational difficulties that the automotive industry faces. Many manufacturers rely on specialised, high-quality component suppliers like Recaro to maintain their reputation for performance and safety. This collapse serves as a reminder that even well-established brands can struggle in a challenging economic landscape marked by rising costs and unstable global markets. To add further pain, the balancing act between meeting stricter emissions regulations and managing dwindling consumer demand for electric vehicles (EVs). Automakers are being pushed to drastically reduce emissions as governments worldwide impose stringent regulations. At the same time, manufacturers are seeing signs of wavering enthusiasm for EVs due to high costs, range anxiety, and lagging infrastructure. Demand for electric vehicles, particularly in Europe and North America, has been softer than many predicted, leading to overproduction in some markets and a mismatch between supply and demand. This environment is creating a financial strain on automakers. Transitioning to greener technology requires heavy investment, yet consumer demand for these technologies is proving volatile. We have recently been consulted by one such business on the cusp of success but unable to secure the financial support needed to get there. Getting advisors on board early is essential. Contact us for help. #recaro #motorsport #insolvency

Maximising the Extra Hour: A Fresh Take on Business Recovery and Restructuring With the clocks going back this month, we’re all given an extra hour—time we rarely have. For businesses in recovery or restructuring, that extra hour is more than just a chance to sleep in; it’s a reminder that time, when used wisely, can make a world of difference. Here’s how to make the most of it—and how these lessons apply to your business long-term. 1. Pause and Reflect In the rush of managing financial issues and operational changes, it’s easy to lose sight of the bigger picture. Use the extra hour to step back and reflect. Ask yourself: Are our recovery efforts aligned with our goals? Have we addressed the root causes of our challenges? Taking time to reflect can provide clarity and new insights. 2. Review Your Financial Position A financial review is often postponed in busy times. Use this hour to reassess your cash flow projections, debt obligations, or relationships with creditors. Identifying financial blind spots early can prevent bigger issues later. 3. Check in With Your Team During restructuring, employees can feel disconnected or uncertain. Take the extra time to reconnect with your team, listen to their concerns, and reinforce the company’s vision. Engaged employees are more productive and adaptive during periods of change. 4. Reevaluate Strategic Decisions Are the decisions made under pressure still working? Use this hour to reconsider whether the choices you made are delivering results. Small adjustments now can avoid costly missteps later. 5. Plan for the Future Recovery is about stabilizing, but long-term growth is the goal. Use your extra time to start thinking beyond recovery. What opportunities await once the business is back on solid ground? 6. Learn to Value Time This extra hour reminds us that time is a valuable resource. Build structured reflection and review into your regular business routine. Consistently making time to pause, review, and adjust will help you stay on course for long-term success. The lesson here? Time is your greatest ally in recovery—use it wisely, and even an extra hour can help guide your business to a stronger future.

NO REAR WINDOW!? THE CAR, THE BUSINESS, AND THE BLIND SPOT DIRECTORS CAN'T IGNORE Polestar has just unveiled the first UK car without a rear window. Instead, it uses cameras to give drivers a view of what’s happening behind them. It’s a bold move in car design, but it got us thinking: what if running a business were like this? What happens when directors lose sight of what’s behind them? In driving, the rear window helps you monitor things beyond your control—traffic, obstacles, and surprises. It’s essential for adjusting to risks that could sneak up on you. Now imagine running a business without that metaphorical rear window—without tracking past financial commitments, creditor behaviour, or market trends. Directors focusing only on growth and the road ahead might miss the warning signs creeping up behind them. By the time financial trouble catches up, it could be too late to steer away from disaster. THE DANGERS OF A BLIND SPOT Many directors are blindsided by financial difficulties because they’re not watching what’s building up behind them. Without a clear view of debt or past decisions, they find themselves reacting to problems only after they’ve become unavoidable. INSTALLING CAMERAS: SEEING THE FULL PICTURE Polestar’s camera system offers a detailed view behind the driver. In business, this means having strong financial controls, monitoring systems, and expert advice that keep you informed. These tools act as your cameras, allowing directors to see what’s happening from all angles. Without them, you’re driving blind—focused on moving forward while unaware of what’s catching up behind you. And in business, a financial crash can be as catastrophic as a car accident. DON'T LET THE PAST REAR-END YOU Successful business leadership requires full visibility, not just of the road ahead but also the terrain behind. Directors who neglect their financial past or creditor relationships may find themselves facing insolvency. Just like you wouldn’t drive a car without full visibility, you shouldn’t run a business without understanding your financial landscape. Regular financial reviews, cash flow forecasts, and expert advice are the cameras that give you a clear view and help avoid disaster. Without them, you risk driving into a financial crash that could have been prevented. In short, a business without a rear window might look futuristic, but without the right visibility, it’s headed for trouble. If you think you are missing your rear view, contact us help@lucasross.co.uk and we'll give you a full picture of what's going on. #INSOLVENCY #BUSINESSRECOVERY #RESTRUCTURING #CASHFLOW

Starting January 2025, the Insolvency Service will implement a 20% fee increase for the Official Receiver, raising concerns for creditors. With more money going to the Official Receiver, creditors—who are already at a loss from unpaid debts—will be left with even less. This fee hike may seem necessary due to rising costs, but it comes at a direct cost to those the insolvency process is meant to assist. The double standard here is striking. If licensed insolvency practitioners (IPs) were to increase fees by 20%, the backlash would be immediate. Creditors and regulators would demand explanations. Yet, when the Official Receiver enacts the same, it faces little resistance. This raises the question: why shouldn’t government fees face the same scrutiny? Creditors, who are already struggling to recover what they are owed, will be further impacted. Insolvency cases are stressful enough without additional fees eating into their potential returns. This fee hike undermines the very purpose of insolvency—to help creditors recover funds, not lose more in the process. A DOUBLE STANDARD Licensed insolvency practitioners operate in a competitive and regulated space. Any sharp increase in their fees would face immediate backlash. But the Official Receiver, a public body, seems to act without facing similar challenges. Given the already high costs of insolvency, a 20% rise feels disproportionate, especially when creditors are the ones most affected. THE LONG-TERM IMPACT This fee hike could set a dangerous precedent, eroding trust in the insolvency process. If creditors consistently see more money funneled into administration rather than debt recovery, confidence in the system could wane. This also raises concerns about transparency—how are these fees determined, and how much oversight exists in the process? STRIKING A BALANCE While the rising costs of operating the Official Receiver are understandable, they need to be balanced with the reality facing creditors. Gradual increases tied to inflation or a clear explanation for such significant hikes would be more reasonable. Creditors deserve fairness, especially when their financial recovery is at stake. In conclusion, the 20% increase in fees creates a worrying dynamic. If private insolvency practitioners would face backlash for such a rise, the same should apply to the Official Receiver. The system must strike a balance between operational costs and protecting creditors’ interests. #insolvency #liquidation #windingup #creditors #debt #credit #creditrisk #debt #debtcollection #risk

A company owned by Amanda Staveley, former director of Newcastle United Football Club, has entered liquidation following a legal dispute with Greek shipping magnate Victor Restis over a long-standing loan. The liquidation was initiated after a London court ruled on a winding-up petition relating to a £10 million loan made to Staveley’s business ventures in 2008. Staveley was ordered to pay £3.5 million after losing a legal bid earlier this year to block a statutory demand for payment of the debt. Although that sum has now been paid, Restis continued to pursue additional interest payments, rejecting a settlement offer of £1.6 million and opting to continue with liquidation proceedings. Staveley has previously argued that agreements were made under duress and that her medical condition played a role in the dispute, claims the court ultimately rejected. The company has not been actively trading for several years and apparently holds no assets. Despite this, Restis intends to appoint insolvency practitioners to investigate the company's affairs and Staveley’s role in its management. It is a brave person to reject £1.6m but pursue a winding up, however it goes to show the distrust Restis must have in Staveley and the representations about the company's position. It is pleasing he sees the value insolvency practitioners bring to investigating the historic conduct and dealings of company directors with a view to generating a financial return. Staveley had played a key role in the acquisition of Newcastle United in 2021 and had previously gained recognition during the financial crisis for facilitating major deals, including the sale of Manchester City and securing investment for Barclays. #insolvencynews #newcastleunited #amandastavely #windingup #liquidation #debt #creditcontrol #investigation #fraudsuspicions #directors